Amaya Gaming Group Inc.
Chartwell Technology Inc.
CALGARY, May 12 /CNW Telbec/ - Chartwell Technology Inc. (TSX: CWH) ("Chartwell"), a leading provider of games, gaming systems and platform for the
regulated online casino gaming industry and Amaya Gaming Group Inc. (TSXV: AYA) ("Amaya") an entertainment solutions provider for the regulated gaming industry
are pleased to announce that they have entered into an Arrangement
Agreement to combine the businesses of both companies.
The proposed transaction will combine two experienced international
gaming technology providers, leveraging their complementary product
offerings, technology and people to better compete in both the online
and land-based gaming industries. Chartwell and Amaya will continue to
focus on their existing businesses with the greatly expanded products,
technologies and expertise resulting from the combination.
Pursuant to the Arrangement Agreement, a wholly owned subsidiary of
Amaya, will acquire all of the issued and outstanding common shares
(the "Chartwell Shares") of Chartwell by way of a plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement") in an arm's length transaction valued at approximately CDN$22.77
Under the terms of the Arrangement Agreement, each Chartwell shareholder
(the "Shareholders") will receive cash in the amount of $0.875 plus 0.125 common shares of
Amaya (Amaya Shares) in exchange for each Chartwell Share. Chartwell
Shareholders will also have the right to elect to receive one-half of
the total consideration for their Chartwell Shares in the form of Amaya
Shares at a deemed value of $3.00 for each Amaya share, subject to a
maximum number of Amaya Shares to be issued to Chartwell Shareholders
of 3,825,197, which represents approximately 9% of the current issued
and outstanding shares of Amaya. The Chartwell Shares have a deemed
value of $1.25 for the purpose of the Arrangement. The Arrangement
represents a 69% premium to the weighted average trading price of the
Chartwell Shares for the 30 trading days ended May 11, 2011 and a
premium of approximately 56% over the closing price of the Chartwell
Shares on May 11, 2011.
The Chartwell Board has unanimously determined that the Arrangement is
fair to the Chartwell Shareholders and that the Arrangement is in the
best interest of Chartwell and has unanimously approved the Arrangement
and resolved to recommend that Chartwell Shareholders vote in favour of
the Arrangement. Evans & Evans Inc., Chartwell's financial advisor, has
provided the Chartwell Board with its preliminary indication that, as
of the date hereof, the consideration to be received by Chartwell
Shareholders pursuant to the Arrangement is fair, from a financial
point of view to such shareholders.
Members of the Chartwell Board and the Chartwell executive officers, who
collectively own approximately 5% of the outstanding Chartwell Shares,
have entered into lock-up agreements with Amaya to vote their Common
Shares in favour of the Arrangement and the transaction is conditional
on holders of at least another 20% of the Chartwell Shares entering
into similar lock-up agreements on or before May 27, 2011.
The Arrangement is subject to customary Toronto Stock Exchange, TSX
Venture Exchange and other regulatory approvals, securing contractual
consents as well as including, but not limited to, the approval of at
least 662/3% of the votes cast in person or by proxy at a special meeting of
Chartwell's Shareholders and the approval of the court pursuant to the Business Corporations Act (Alberta). The Arrangement is also conditional upon Chartwell's Board
receiving a final fairness opinion from Evans & Evans Inc.
A meeting of Chartwell Shareholders for the purpose of considering the
Arrangement is expected to be held in early July, 2011. An information
circular in connection with the Arrangement is expected be mailed to
Chartwell Shareholders in mid-June. It is expected that this
transaction would be completed in July 2011.
Under the Arrangement Agreement, Chartwell has agreed that it will not
solicit or initiate any discussions concerning the pursuit of any other
acquisition proposals. Each of Chartwell and Amaya has also agreed to
pay a termination fee of $1.0 million to the other in certain other
circumstances. In addition, Amaya has the right to match any competing
superior proposal for Chartwell in the event such a proposal is made.
Following the Arrangement, the Chartwell Shares will be de-listed from
the TSX, and Chartwell will continue to be run by its current
management team as a wholly-owned subsidiary of Amaya.
All outstanding options to acquire Chartwell Shares will either have
been exercised or surrendered for cancellation prior to the closing
date of the transaction, and, subject to TSX Venture Exchange approval,
Amaya will grant, as of the effective date of this proposed
transaction, an aggregate 560,000 options to current officers and
employees of Chartwell. The options will be granted at an exercise
price based on the market price of Amaya shares at such time and will
be subject to the provisions of the Amaya Stock Option Plan.
In commenting on the proposed transaction, Darold H. Parken, President
and CEO of Chartwell Technology Inc. said, "The combination of
Chartwell and Amaya presents a tremendous range of synergies which will
benefit both companies and their customers. The resulting company will
have a significantly expanded product range, delivery channel
capability and market reach. We are very excited about joining forces
and working with the team at Amaya to build a highly diversified
international gaming company and to better serve our customers."
David Baazov, President and CEO of Amaya Gaming Group Inc. commented
that: "The proposed transaction represents a significant step for Amaya
in our strategy to accelerate growth in the regulated interactive
gaming industry. We are delighted that both companies have recognized
the strategic, operational and financial benefits of the synergies
between the two companies. The combination of Chartwell and Amaya will
increase shareholder value and benefit both companies, by leveraging
complementary technologies and reinforcing capabilities to further
penetrate target markets."
Chartwell specialises in the development of leading-edge games, gaming
systems and platform for the regulated online casino gaming industry.
Chartwell is certified or licensed to offer a range of services in all
of the leading regulated online gaming markets. Chartwell is not a
gaming operator; our clients own their own brands and databases
entirely and exclusively. Chartwell's team of highly trained
professionals is committed to delivering the highest quality software
and maintaining its market edge through continuous development and
unparalleled customer support.
Amaya is engaged in the design, development, manufacturing, distribution
and sale of technology based gaming solutions for the regulated gaming
industry worldwide. For more information please visit www.amayagaming.com.
"Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
Certain statements contained herein may constitute forward-looking
statements. These statements relate to future events or our future
performance. All statements other than statements of historical fact
may be forward-looking statements, including those with respect to the
completion of the proposed business combination and the future business
prospects of the combined businesses. We believe that the expectations
reflected in the forward-looking statements are reasonable based upon
management's current views but no assurance can be given that these
expectations will prove to be correct and such forward-looking
statements should not be unduly relied upon. No assurance can be given
that actual results, performance or achievement expressed in, or
implied by these forward looking statements will occur, or if they do,
that any benefits will be derived from them. The forward-looking
statements are made as of the date of this release and Chartwell does
not undertake any obligation to update publicly or to revise any of the
forward-looking statements, except as required by securities law. In
making certain forward-looking statements contained herein, we have
assumed that the proposed business combination will be successfully
completed on the terms described herein.
Our actual results could differ materially from those anticipated in
these forward-looking statements as a result of factors that may
include, but are not limited to: a failure to complete the proposed
business combination described herein, our ability to continue to
attract new licensees, the financial success and future growth of
present licensees, delays in development, the impact of government
regulation, licensing and laws affecting international operations, the
impact of price competition, loss of business or credit risks
associated with current and prospective customers, the impact of
consolidations in the online gaming industry and other risks detailed
from time to time in the Annual Information Forms and Management's
Discussion and Analysis, for each of Chartwell and Amaya, copies of
which may be found at www.sedar.com.
SOURCE AMAYA GAMING GROUP INC.
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